Naval Base Guam construction contract awarded to Tutor Perini Corporation for $23.8M, extending revitalization efforts

Contract Overview

Contract Amount: $23,845,960 ($23.8M)

Contractor: Tutor Perini Corporation

Awarding Agency: Department of Defense

Start Date: 2013-09-12

End Date: 2015-10-10

Contract Duration: 758 days

Daily Burn Rate: $31.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: IGF::OT::IGF FIRM FIXED PRICED TASK ORDER FOR CONSTRUCTION SERVICES UNDER THIRD OPTION PERIOD FOR P-1301 WHOLE HOUSE REVITALIZTION PHASE I AT LOCKWOOD TERRACE, NAVAL BASE GUAM

Place of Performance

Location: SANTA RITA, GUAM County, GUAM, 96915, UNITED STATES OF AMERICA

Plain-Language Summary

Department of Defense obligated $23.8 million to TUTOR PERINI CORPORATION for work described as: IGF::OT::IGF FIRM FIXED PRICED TASK ORDER FOR CONSTRUCTION SERVICES UNDER THIRD OPTION PERIOD FOR P-1301 WHOLE HOUSE REVITALIZTION PHASE I AT LOCKWOOD TERRACE, NAVAL BASE GUAM Key points: 1. The contract value represents a significant investment in infrastructure upgrades at Naval Base Guam. 2. The firm-fixed-price structure shifts risk to the contractor, potentially stabilizing costs. 3. The duration of the task order suggests a complex and multi-faceted construction project. 4. The project's focus on revitalization indicates a need for modernization and improved facilities. 5. The award falls under a broader task order structure, implying potential for future work or related projects.

Value Assessment

Rating: fair

The contract value of $23.8 million for construction services appears within a reasonable range for a large-scale revitalization project at a naval base. Benchmarking against similar large construction contracts for military installations would provide a clearer picture of value for money. The firm-fixed-price nature of the award suggests that the contractor has assumed the primary risk for cost overruns, which can be a positive indicator for the government if the contractor's bid was competitive and well-researched.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. The presence of five bids suggests a healthy level of interest and competition for this type of work. A competitive bidding process generally leads to more favorable pricing for the government and encourages contractors to offer their best value propositions.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely resulted in a more competitive price and a wider range of potential solutions, maximizing the value of the government's investment.

Public Impact

The primary beneficiaries are the U.S. Navy personnel and their families stationed at Naval Base Guam, who will gain access to revitalized housing and facilities. The services delivered include comprehensive construction and revitalization of housing units, enhancing the quality of life on the base. The geographic impact is localized to Naval Base Guam, specifically Lockwood Terrace, contributing to the modernization of this military installation. The project will likely involve a significant local workforce, including skilled tradespeople and construction laborers, providing employment opportunities in Guam.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen site conditions arise, despite the firm-fixed-price structure.
Ensuring timely completion within the specified duration is crucial to avoid impacting base operations.
Quality control and adherence to construction standards will be paramount for the long-term durability of the revitalized facilities.

Positive Signals

The firm-fixed-price contract shifts cost risk to the contractor, providing budget certainty.
Awarding under full and open competition suggests a competitive pricing environment.
The project's focus on revitalization indicates a commitment to improving essential infrastructure.

Sector Analysis

This contract falls within the construction sector, specifically focusing on infrastructure development and renovation for a government facility. The market for large-scale military construction is characterized by significant project values, stringent requirements, and often involves specialized contractors. Comparable spending benchmarks for similar revitalization projects at naval bases can vary widely based on scope, location, and specific facility needs, but projects in the tens of millions of dollars are common for major upgrades.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Tutor Perini Corporation, may engage small businesses for subcontracting opportunities. The scale of this project suggests that subcontracting could be a significant component, potentially providing work for local Guam-based small businesses in various trades. The extent of small business participation will depend on the prime contractor's subcontracting plan and opportunities available.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and engineering divisions, ensuring compliance with contract terms and construction quality. Accountability measures are embedded in the firm-fixed-price structure, incentivizing the contractor to meet performance standards. Transparency is facilitated through contract award databases and reporting requirements, though specific project-level oversight details may not be publicly detailed.

Related Government Programs

Naval Base Guam Infrastructure Projects
Military Housing Revitalization Programs
Department of Defense Construction Contracts
Third Option Period Task Orders

Risk Flags

Potential for cost escalation if scope is not well-defined.
Risk of contractor performance issues impacting schedule or quality.
Dependency on specific contractor expertise for specialized construction.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.8 million to TUTOR PERINI CORPORATION. IGF::OT::IGF FIRM FIXED PRICED TASK ORDER FOR CONSTRUCTION SERVICES UNDER THIRD OPTION PERIOD FOR P-1301 WHOLE HOUSE REVITALIZTION PHASE I AT LOCKWOOD TERRACE, NAVAL BASE GUAM

Who is the contractor on this award?

The obligated recipient is TUTOR PERINI CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $23.8 million.

What is the period of performance?

Start: 2013-09-12. End: 2015-10-10.

What is Tutor Perini Corporation's track record with large-scale federal construction projects, particularly for the Department of Defense?

Tutor Perini Corporation has a substantial history of executing large-scale construction projects for various federal agencies, including the Department of Defense. Their portfolio includes significant military construction, infrastructure development, and renovation projects across numerous bases and installations. While specific performance details for every contract are not always publicly available, the company's longevity and continued awards suggest a general capability to manage complex federal projects. However, like many large contractors, they may have experienced performance issues or disputes on specific contracts, which would be detailed in contract performance reports or legal filings if significant enough. A thorough review would involve examining past performance evaluations and any documented issues.

How does the $23.8 million contract value compare to similar housing revitalization projects at other naval bases?

The $23.8 million contract value for the P-1301 Whole House Revitalization Phase I at Lockwood Terrace, Naval Base Guam, is substantial and aligns with the typical investment required for large-scale military housing upgrades. Projects of this nature, involving comprehensive renovation of multiple housing units, can easily reach tens of millions of dollars. Factors influencing cost include the number of units, the extent of renovation (e.g., structural, systems upgrades, cosmetic), local labor and material costs (which can be higher in locations like Guam), and specific security or environmental requirements. Without detailed project scopes for comparable contracts, a precise benchmark is difficult, but this figure is not unusual for a significant revitalization effort on a military installation.

What are the primary risks associated with this firm-fixed-price construction contract for the government?

While firm-fixed-price (FFP) contracts are designed to transfer cost risk to the contractor, the government still faces potential risks. One primary risk is that the contractor may cut corners on quality or materials to maintain profitability if they underestimated costs or encounter unforeseen issues, potentially leading to premature failures or increased maintenance later. Another risk is contractor default or bankruptcy, which can cause significant delays and require the government to procure a replacement contractor, often at a higher cost. Furthermore, if the initial scope was poorly defined, the government might face change orders, which can increase the total contract cost, negating some FFP benefits. Finally, the government bears the risk of inadequate contractor performance if oversight is insufficient.

What is the historical spending pattern for construction services at Naval Base Guam over the last five years?

Analyzing historical spending for construction services at Naval Base Guam over the last five years would reveal trends in infrastructure investment and modernization efforts. This specific contract, awarded in 2013 with an end date in 2015, represents a portion of that spending. Generally, naval bases require continuous investment in facilities maintenance, upgrades, and new construction to support operational readiness and quality of life for personnel. Spending patterns are influenced by military construction budgets, strategic priorities, and the age and condition of existing infrastructure. A detailed analysis would require accessing historical contract award data for Naval Base Guam across all agencies and contract types within the construction domain.

How effective are the competition dynamics (5 bidders) in ensuring optimal value for taxpayers on this type of project?

Having five bidders for a full and open competition on a project of this magnitude is generally a positive indicator for achieving optimal value for taxpayers. A larger number of bidders typically increases the likelihood of receiving competitive pricing, as companies vie for the contract. It also broadens the pool of potential solutions and innovations. However, the effectiveness is not solely determined by the number of bidders but also by the quality and experience of those bidders, the clarity of the solicitation, and the government's ability to evaluate proposals effectively. If the bidders were all highly qualified and submitted competitive bids, then five bidders would likely lead to good value. If some bidders were less qualified or the competition was not robust, the value might be less optimal.

What are the implications of this contract being under the 'Third Option Period' for future spending or project scope?

The designation 'Third Option Period' for this task order implies that the original contract likely had a base period and potentially one or two previous option periods. This suggests a multi-year relationship with the contractor for ongoing services or phased construction. For future spending, it indicates that the initial contract vehicle was structured to allow for extended work, potentially at pre-negotiated rates. This can offer cost savings and administrative efficiency compared to re-competing the entire requirement. However, it also means that the government has committed to a longer-term engagement, and the total spending could increase significantly if subsequent option periods are exercised. The 'Third Option Period' itself signifies a continuation of work under the existing contract terms.

Industry Classification

NAICS: Construction › Highway, Street, and Bridge Construction › Highway, Street, and Bridge Construction

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6274209R1314

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15901 OLDEN ST, SYLMAR, CA, 91342

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $23,845,960

Exercised Options: $23,845,960

Current Obligation: $23,845,960

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6274210D1312

IDV Type: IDC

Timeline